BUSINESS
Datalex to raise USD96m in flotation
06-10-2000
by Aoidin Scully
Dublin-based IT solutions provider Datalex is to float on both the Dublin and Nasdaq markets, it announced on Friday. The company hopes to raise USD96 million.
The first day of trading is expected to be October 20.
Datalex, which supplies e-business infrastructure and solutions for the global travel industry, plans to float 25 percent of its total equity, putting a value on the company of between USD428 million and USD496 million.
It will float in excess of 16 million shares and has set a price range of EUR7.16 to EUR8.31 for ordinary shares and USD12.50 to USD8.31 per American depository share (ADS). Each ADS represents the right to receive two ordinary shares.
"The on-line travel market is one that will continue to grow exponentially," said Neil Wilson, Datalex chief executive officer and majority shareholder. "We intend to be the leading player in that market."
Datalex already has a number of high-profile clients, including Delta and American Airlines, British Airways, Thomas Cook, Trailfinders, and Ebookers.com. The company also worked with Pricewaterhouse on the new Aer Lingus site, which is scheduled to go live within the next few months.
Repeat business accounts for 50 percent of the company's revenue base, which reached USD12.6 million for the first six months of 2000. Licensing currently accounts for 65 percent of revenues.
Travel has become one of the largest e-commerce categories, with Forrester Research estimating that approximately nine million US households booked travel on-line in 1999 and that this figure will grow to 26 million by 2003. Jupiter Communications predicts that US consumers will purchase USD 21.7 billion of on-line travel by 2003.
Suggestions that the on-line industry will put traditional travel agencies out of business, however, were refuted by Wilson. "The worldwide travel market is worth USD3.5 trillion, or 11.7 percent of the world's GDP.
"It's estimated that USD30 billion to USD40 billion worth of that will take place over the Internet so that still leaves a few trillion for the traditional agencies," he said. He maintained that the Internet augments the operations of travel agents but that agents still have the most significant role.
The firm, which currently employs 450 staff in 12 locations around the world (145 in Dublin) sustained a loss for the first time last year but attributed that to costs involved in expansion. Datalex recently acquired Sight & Sound Software in the US and Temawork Solutions in the UK.
"Our model will return the company to profitability within an acceptable time frame," insisted finance director Liam Booth. "We're not talking about a period of years here," he added.
In April this year, Datalex announced that it had merged with Sight & Sound, the Oregon-based company that developed the on-line booking service for American Airlines.
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